SGDJPY, CADJPY, AUDNZD, AUDCAD with Trade Possibilities Today

Cory Mitchell, CMT

SGDJPY Moved lower off the trendline yesterday. That marked the first bearish move in a week. The price has bounced up but is consolidating below the prior high. 

A break lower from the consolidation would signal a shorting opportunity, with a stop loss above the consolidation and a target near 75.15. This is in the middle of the price structure. I typically put the target near the bottom, but in this case, we also have a lot of swing lows mid-structure. Can always get out with a profit and get back in if needed.

*Price has broken lower while writing this.

The trade provides a more than 5:1 reward:risk (R:R). Greater reward potential was available if dropping down to a 15- or 5-minute chart for the entry.

SGDJPY is highly correlated to CADJPY. Trading both with a full position size in each doubles the risk, since they are similar trades. Pick one, or put half a position size in both unless you are comfortable with the double-risk.

CADJPY has already dropped out of a consolidation on the hourly chart, triggering short at 76.73. A stop loss is placed above the recent consolidations with a target near 75.63. The target is once again mid-structure due to multiple swing lows in that vicinity. The R:R is greater than 5:1.

There is a short-term opportunity in AUDNZD as the price has moved into a shallowly descending channel. 

The price consolidated near the top of the channel and has broken lower. The trade is more visible on a 15-minute chart. The short occurred at 1.0669. A stop loss can be placed above the consolidation or above the recent swing high. Target down near 1.0626, above the prior swing low.

R:R is 3.5:1 up to 6.5:1 based on where the stop loss is placed. 

The NZD has an interest rate decision tonight. Be aware of that. The trade still has time to move, but I will be closing this one out prior to the announcement.

The AUDNZD is on the radar because of its longer-term chart. 

AUDCAD is also on the radar due to its longer-term chart outlook. 

Note that AUDCAD and AUDNZD are highly correlated. As mentioned above with the other pairs, be aware of the potential for double risk. Position size accordingly.

A recent short trade was stopped out (flat, no gain or loss) as the price moved above the recent highs. It is struggling today and the short-term charts are showing weakness. This could be a false breakout, in a pair that has already been quite choppy lately.

I am once again short this one. The chart shows my approximate trade levels. 

Learn more about analyzing price action:

Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.

Assume I have positions, all the time, in many pairs.

Trades are based on strategies and are not meant to be predictions. The number of trades won varies between 30% and 60% based on the strategy. My objective is to make money based on solid reward:risk ratios, not try to predict every move of the market.

Comments (2)
No. 1-2
CoryMitchell-CMT
CoryMitchell-CMT

Yes, moving well so far.

I am out of AUDNZD with a nice profit ahead of the NZD announcement.

AUDCAD still choppying around but heading back toward the lows of the day.

RomanFX
RomanFX

Thanks Cory! Superb analysis. SGDJPY had a nice evening star on 4 hrs. I am short on that as well!


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